FINANCIAL CONFERENCE Consolidated Business Results and Forecast. May 15, 2017 NSK Ltd. Cautionary Statements with Respect to Forward-Looking Statements Statements made in this report with respect to plans, strategies and future performance that are not historical fact are forward-looking statements. NSK cautions that a number of factors could cause actual results to differ materially from those discussed in the forward-looking statements. Note : This document is an English translation of material written initially in Japanese. The Japanese original should be considered the primary version
Contents 1.Consolidated Business Results for the Year Ended March 31, 2017 2. Consolidated Business Forecast for the Year Ending March 31, 2018 3.Progress of the 5 th Mid-Term Management Plan (Supplementary Information) 1
1.Consolidated Business Results for the Year Ended March 31, 2017 2
Summary of Consolidated Business Results for the Year Ended March 31, 2017 Business Environment Industrial machinery business: Although demand bottomed out in Q2, conditions varied by sector. Automotive business: Overall market environment remained steady due to solid sales in North America and expansion in China. Exchange rate: Yen appreciated against the USD, Euro, CNY by more than 10% YoY. Summary of Business Results Consolidated Business Results [IFRS] () (compared to FY2015) Net Sales : 949.2 billion ( -26.1 billion / -2.7%) Operating Income : 65.3 billion ( -24.2 billion / -27.0%) Net Income Attributable to Owners of the Parent : 45.6 billion ( -20.2 billion / -30.7%) <Reference> Segment Income* : 83.8 billion ( -10.5 billion / -11.1%) *Segment Income : Operating income before deduction of other operating expenses : Both net sales and operating income decreased. Exchange rate impact: Sales: -75.1 billion, Operating Income: -17.4 billion. : Net sales increased on a volume basis; automotive rose, industrial machinery remained flat. Excluding the impact of other operating expenses (Antimonopoly -related losses, etc. : 18.5 billion) and the exchange rate, operating income increased year-on-year. Enhanced shareholder returns: full-year dividend 38 (Ordinary 28, anniversary commemorative dividend 10) and 15.0 billion acquisition of treasury stock. Total return ratio: 77%. 3
Summary of Consolidated Business Results for the Year Ended March 31, 2017 IFRS FY2015 Increase/ Decrease Difference <Original Forecast> Net sales 975.3 949.2-26.1-2.7% 920.0 Operating income <%> 89.5 <9.2%> 65.3 <6.9%> -24.2-27.0% 65.0 <7.1%> Income before income taxes 87.2 63.6-23.6-27.1% 63.0 Net income attributable to owners of the Parent 65.7 45.6-20.2-30.7% 40.0 *Reference (Ex. rate:1usd=) ( 1EUR=) ( 1CNY=) Major indexes 120.14 132.58 18.85 108.42 118.84 16.11-11.72-13.74-2.74 Segment Income : Operating income before deduction of other operating expenses Other operating expenses : Antimonopoly -related losses, foreign exchange losses -9.8% -10.4% -14.5% Segment Income 94.3 83.8-10.5-11.1% <%> <9.7%> <8.8%> ROE 14.3% 9.9% Net D/E ratio (times) 0.23 0.28 Inventory turnover (times) 7.2 7.2 105 120 16.7 4
Sales and O.I. by Business Segment IFRS FY2015 Increase/ Decrease Difference <Original Forecast> Net sales 975.3 949.2-26.1-2.7% 920.0 Industrial Machinery Business 243.4 226.9-16.5-6.8% 242.0 Industrial machinery Bearings 201.7 184.3-17.4-8.6% 202.0 Precision machinery and parts 41.7 42.7 +1.0 +2.3% 40.0 Automotive Business 705.5 696.3-9.2-1.3% 656.0 Automotive Bearings 330.7 328.0-2.7-0.8% 306.0 Automotive Components 374.8 368.3-6.5-1.7% 350.0 Others 52.0 52.9 +0.9 +1.6% 49.0 Eliminations -25.6-26.9-1.3 - -27.0 Operating income 89.5 <9.2%> 65.3 <6.9%> -24.2-27.0% 65.0 Industrial Machinery Business 20.2 <8.3%> 14.7 <6.5%> -5.5-27.3% 13.0 Automotive Business 70.8 <10.0%> 64.6 <9.3%> -6.3-8.8% 49.0 Others 3.1 <5.9%> 4.4 <8.4%> +1.4 +44.3% 4.5 Other operating expenses / Eliminations -4.5-18.3-13.8 - -1.5 Part of industrial machinery business operations were transferred to the automotive business in the year ended March 31 st, 2017. Accordingly, figures for the ual column of the previous year have been reclassified to match current segments. (No change was made to the original forecast.) 5
Business Results: Industrial Machinery Business IFRS FY2015 Increase/ Decrease Difference Net sales 243.4 226.9-16.5-6.8% Industrial machinery Bearings Precision machinery and parts Operating income (Ex. rate:1usd=) ( 1EUR=) ( 1CNY=) 201.7 184.3-17.4-8.6% 20.2 <8.3%> 41.7 42.7 120.14 132.58 18.85 14.7 <6.5%> 108.42 118.84 16.11 +1.0 +2.3% -5.5-27.3% -11.72-13.74-2.74-9.8% -10.4% -14.5% 11.8% 9.8% Ind BRG Precision O.I 6.3% 6.8% 4.6% 2.9% 66.1 62.0 11.4 57.7 57.7 54.3 11.0 53.6 9.6 9.7 9.8 10.0 O.I (%) 54.7 7.8 51.0 48.0 48.0 44.4 43.6 46.8 49.4 6.1 4.6 4.7 3.6 3.7 2.6 1.6 1USD= 121.36 122.24 121.50 115.46 108.25 102.45 109.34 113.64 1EUR= 134.16 135.98 132.94 127.24 122.17 114.27 117.83 121.09 1CNY= 19.56 19.32 18.90 17.62 16.54 15.36 15.98 16.56 Part of industrial machinery business operations were transferred to the automotive business. Accordingly, figures for the previous year have been reclassified to match current segments. 8.1% 7.7% 57.5 10.7 61.5 12.1 FY15 FY16 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Hit market bottom in Q2. Annual volume remained flat year-on-year due to 2H recovery. Recovery sectors: machine tools, home appliances, railcars, construction, and agriculture. Precision product sales expanded. Strong demand from semiconductor, liquid crystal display, and machine tool sectors. decline in both net sales and operating income due to appreciation of the yen. Operating income and income ratio trending toward recovery. 6
Business Results: Automotive Business IFRS FY2015 Increase/ Decrease Difference Net sales 705.5 696.3-9.2-1.3% Auto BRG Auto Comp O.I O.I (%) 11.7% 9.9% 9.4% 9.0% 9.3% 9.5% 10.8% 7.4% 177.8 182.1 169.7 176.0 171.2 178.1 182.8 164.3 Automotive Bearings 330.7 328.0-2.7-0.8% Automotive Components 374.8 368.3-6.5-1.7% Operating income (Ex. rate:1usd=) ( 1EUR=) ( 1CNY=) 70.8 <10.0%> 120.14 132.58 18.85 64.6 <9.3%> 108.42 118.84 16.11-6.3-8.8% -11.72-13.74-2.74-9.8% -10.4% -14.5% 95.0 88.9 97.4 93.5 90.1 87.5 94.4 96.2 21.3 19.7 17.7 16.0 15.9 15.9 16.8 82.8 80.8 84.6 12.2 82.5 81.0 76.8 83.6 86.6 FY15 Q1 Q2 Q3 Q4 FY16 Q1 Q2 Q3 Q4 1USD= 121.36 122.24 121.50 115.46 108.25 102.45 109.34 113.64 1EUR= 134.16 135.98 132.94 127.24 122.17 114.27 117.83 121.09 1CNY= 19.56 19.32 18.90 17.62 16.54 15.36 15.98 16.56 Part of industrial machinery business operations were transferred to the automotive business. Accordingly, figures for the previous year have been reclassified to match current segments. Business remained solid. net sales decreased due to higher yen, but increased by 7% on a volume basis. Substantial volume increase was China, partly due to sluggish demand in FY2015. sales in North America declined due to model change of a vehicle model (auto components). operating income decreased due to strong yen and recall-related costs. Operating income ratio: above 9%. 7
Operating Income: Factors Behind Change (IFRS FY2015 ) Decline in sales price -8.8 Increase in costs -7.5 Volume increase/ Product mix +13.3 Reduction of external procurement costs etc. +9.6-17.4 Other operating expenses/ Equity method profits Effect of exchange rate fluctuations -13.4 89.5 65.3 FY2015-24.2 8
Sales Results by Customer Location IFRS FY2015 Full year Full year Increase/ Decrease Difference Net sales 975.3 949.2-26.1-2.7% Japan 318.4 330.5 +12.1 +3.8% Non-Japan 656.9 618.7-38.2-5.8% <Non-Japan ratio> <67.4%> <65.2%> The Americas 183.7 165.2-18.5-10.1% Europe 131.8 121.9-9.9-7.5% China 204.4 201.2-3.2-1.6% Other Asia 137.0 130.4-6.7-4.9% 300 Japan The Americas Europe China Other Asia 251.2 238.5 245.7 239.9 231.8 242.1 251.5 250 223.8 35.2 35.3 33.6 33.0 31.0 33.2 35.7 200 30.5 54.7 46.7 54.8 48.2 46.9 55.8 50.7 47.7 150 32.8 30.8 33.1 35.2 32.7 26.8 28.5 33.9 100 47.3 45.1 44.4 46.9 43.9 38.9 39.4 43.0 50 81.3 80.7 79.9 76.6 77.3 79.9 85.2 88.1 0 FY2015 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 9
2. Consolidated Business Forecast for the Year Ending March 31, 2018 10
Summary of Consolidated Business Forecast for the Year Ending March 31, 2018 Forecasted Business Environment Industrial machinery: recovery trend to continue, but direction unclear from Q3 onwards. Automotive: Production volume to continue moderate growth, but volume in North America forecast to hit a peak. Concern over appreciation of the yen due to unstable currency movements. Cost increases due to rise in raw material prices. Consolidated Business Forecast [IFRS] Net Sales : 960.0 billion ( +10.8 billion / +1.1%) Operating Income : 82.0 billion ( +16.7 billion / +25.5%) Net Income Attributable to Owners of the Parent : Business Forecast (FY2017) (compared to ) 56.0 billion ( +10.4 billion / +22.9%) increase in both sales and operating income. Stronger yen anticipated. Exchange rate: USD= 105, EURO= 115, CNY= 15.7 Allocate resources for future growth: CAPEX 68.0 billion ( +16%) Annual dividend: 38 (1 st half 19, 2 nd half 19 ), Return ratio:36% 11
Summary of Consolidated Business Forecast for the Year Ending March 31, 2018 IFRS FY2017 1 st half 2 nd half Full year 1 st half <Forecast> 2 nd half <Forecast> Full year <Forecast> Increase/ Decrease Difference Net sales 455.6 493.6 949.2 474.0 486.0 960.0 +10.8 +1.1% Operating income 27.3 38.0 65.3 39.0 43.0 82.0 +16.7 +25.5% <%> <6.0%> <7.7%> <6.9%> <8.2%> <8.8%> <8.5%> Income before income taxes 26.5 37.1 63.6 38.5 42.5 81.0 +17.4 +27.3% Net income attributable to owners of the Parent 19.9 25.7 45.6 27.0 29.0 56.0 +10.4 +22.9% (Ex. rate:1usd=) ( 1EUR=) ( 1CNY=) 105.35 118.22 15.95 111.49 119.46 16.27 108.42 118.84 16.11 105 115 15.7 105 115 15.7 105 115 15.7-3.42-3.84-0.41-3.2% -3.2% -2.5% 12
Forecast by Business Segment IFRS FY2017 1 st half 2 nd half Full year 1 st half <Forecast> 2 nd half <Forecast> Full year <Forecast> Increase/ Decrease Difference Net sales 455.6 493.6 949.2 474.0 486.0 960.0 +10.8 +1.1% Industrial machinery Business 107.9 119.1 226.9 116.0 117.5 233.5 +6.6 +2.9% Industrial machinery Bearings 88.0 96.2 184.3 93.0 94.5 187.5 +3.2 +1.8% Precision machinery and parts 19.8 22.8 42.7 23.0 23.0 46.0 +3.3 +7.8% Automotive Business 335.4 360.9 696.3 344.0 354.0 698.0 +1.7 +0.2% Automotive Bearings 157.8 170.2 328.0 168.5 174.5 343.0 +15.0 +4.6% Automotive Components 177.6 190.6 368.3 175.5 179.5 355.0-13.3-3.6% Others 23.8 29.0 52.9 26.0 27.5 53.5 +0.6 +1.2% Eliminations -11.5-15.4-26.9-12.0-13.0-25.0 +1.9 - Operating income 27.3 <6.0%> 38.0 <7.7%> 65.3 <6.9%> 39.0 <8.2%> 43.0 <8.8%> 82.0 <8.5%> +16.7 +25.5% Industrial Machinery Business 5.3 <4.9%> 9.4 <7.9%> 14.7 <6.5%> 8.0 <6.9%> 9.5 <8.1%> 17.5 <7.5%> +2.8 +19.4% Automotive Business 28.1 <8.4%> 36.5 <10.1%> 64.6 <9.3%> 30.0 <8.7%> 32.5 <9.2%> 62.5 <9.0%> -2.1-3.2% Others 1.5 <6.4%> 2.9 <10.0%> 4.4 <8.4%> 2.0 <7.7%> 2.0 <7.3%> 4.0 <7.5%> -0.4-9.4% Other operating expenses / Eliminations -7.6-10.8-18.3-1.0-1.0-2.0 +16.3-13
Operating Income: Factors Behind Change ( FY2017 Forecast) Other operating expenses/ Equity method profits +16.9 65.3 Decline in sales price -7.0 Increase in costs -5.2 Reduction of external procurement costs etc. Volume increase/ Product mix +9.0 +6.0-3.0 Effect of exchange rate fluctuations 82.0 +16.7 FY2017 Forecast 14
Sales Results by Customer Location IFRS FY2017 1st half 2nd half Full year 1st half <Forecast> 2nd half <Forecast> Full year <Forecast> Increase/ Decrease Difference Net sales 455.6 493.6 949.2 474.0 486.0 960.0 +10.8 +1.1% Japan 157.2 173.3 330.5 174.5 179.5 354.0 +23.5 +7.1% Non-Japan <Non-Japan ratio> 298.4 <65.5%> 320.3 <64.9%> 618.7 <65.2%> 299.5 <63.2%> 306.5 <63.1%> 606.0 <63.1%> -12.7-2.0% The Americas 82.7 82.4 165.2 75.0 77.0 152.0-13.2-8.0% Europe 59.5 62.5 121.9 59.5 62.5 122.0 +0.1 +0.1% China 94.7 106.5 201.2 100.5 101.0 201.5 +0.3 +0.2% Other Asia 61.5 68.9 130.4 64.5 66.0 130.5 +0.1 +0.1% 15
The 5 th MTP Second-year Management Policy Key Initiatives of FY2017 5 th MTP: Assess progress and deliver results Absorb and recover cost hike factors. (raw materials, labor) Invest and control resources in growth and priority areas. Safety, Quality, Compliance Industrial Machinery Business Maximize sales opportunities in an economic recovery phase. Strengthen supply management. Focus on existing key areas and expand into new technology and fields. Automotive Business Increase sales and secure profitability in powertrain business. Expand order intake in steering and actuator business. Leverage elemental technology to develop new products amidst rapid technological innovation 16
3.Progress of the 5 th Mid-Term Management Plan 17
The 5 th MTP Concept NSK Vision 2026 Setting the Future in Motion Embark on new chapter in evolution towards next 100 years Sustainable Growth Deliver new value to society Work together with stakeholders Operational Excellence Reconstruct profit base Increase and stabilize profitability Monozukuri, quality, personnel Innovate and Challenge Expand into new growth fields Growth in core businesses New products, new fields Industrial Machinery Automotive Safety Quality Compliance Business Foundation as 1 trillion Yen Company 18
Industrial Machinery Business: 1 Business Environment and Forecast Demand trend by Sector Sector FY16 1H to 2H FY16 2H to FY17 1H FY17 1H to 2H Home Appliances Steel Plant Facilities Fluid Machinery Mining / Construction Machinery Agricultural Machinery Wind Turbines Railcars Machine Tools Injection Molding Semiconductors Robots Aftermarket Demand forecast: Increase, Unchanged, Decrease Recovery trend to continue, although variance by sector 2H: concerns over slowdown remain 300 200 100 0 40 20 0 243.0 37.3 205.7 FY2013 60 9.8% 23.7 276.4 44.0 232.4 FY2014 Sales 243.4 41.7 226.9 233.5 42.7 46.0 201.7 184.3 187.5 FY2017 May Fcst Operating Income / Margin 12.4% 34.4 FY2013 FY2014 JP GAAP FY2015 8.3% 20.2 FY2015 6.5% 7.5% 14.7 IFRS 17.5 FY2017 May Fcst *Part of industrial machinery business operations were transferred to the automotive business. Accordingly, figures for FY2015 have been reclassified to match current segments. Precision Machinery Industrial and Parts Machinery Bearings 19
Industrial Machinery Business: 2 The 5 th MTP: Status of Key Initiatives Operational Excellence Respond to changes in business environment Respond to fiercer competition Differentiate from Chinese manufacturers Clarify target markets Improve cost competitiveness and productivity Review cost from design phase Accelerate global procurement Productivity improvement initiatives :F2(Fujisawa) project New building: mass production to begin in Autumn 2017 Install hybrid line for extra large sized bearings :Enhance production at Shenyang plant (China) :Expand hybrid lines for precision machinery Expand target fields Railcars FY17 SOP/Entry projects Europe:SOP in French National Railways (SNCF) MRO business China: entry into CRRC Shinkansen Electrical High-spec home appliances Drum type washing machines High-speed vacuum cleaners Machine tools Strengthen No.1 position Precision bearings for main spindles Secure stable supply : Global production, procurement Aftermarket Improve customer service Introduce new systems :Provide detailed delivery information :Shorten lead time :Provide further product information Inventory policy Secure strategic inventory MRO policy Solid growth in China railways Full-scale demand in non-japan wind turbine MRO business Capture MRO business steadily MRO demand 92 127 181 200 200 <Wind turbine machine age> 280 10 yrs or more 5-10 yrs 5 yrs or less New building at Fujisawa Plant(Kirihara) 2015 2020 Unit:Gw Source:MAKE 20
Industrial Machinery Business: 3 The 5 th MTP: Status of Key Initiatives Create new added value and demand CMS Reduce industrial machinery downtime Growing demand for stable operation Enhance development of CMS technology/products Established CMS Development Department Expand into related sectors (wind turbines, machine tools, general industrial machinery) Joint projects with outside research institutes Enhance damage diagnosis through new CMS diagnostic device (BD-2) Prepare for overseas markets Damping Control Unit BD-2 (Bearing Doctor-2) Damping control unit for bridges Enhance safety of bridge piers, prevent collapse Easy installation Changes the axial motion caused by earthquake into rotational motion by ball screw Innovate and Challenge Initiatives for new fields Next-generation personal mobility: Capital participation in WHILL, Inc. Combine NSK's elemental component and mechatronics technologies with WHILL's mobility development technology Provide reliable bearings for use in WHILL's patented Omni-wheels Manipulation system <For Biotechnology> Micro-fertilization(ICSI) Inject DNA/iPS cells into egg cells Cell transport <For Industrial machinery> Remove foreign material from microelectronic parts Achieve high-precision positioning of semiconductor parts Guide Robot LIGHBOT Obstacle-avoidance guide robot with navigation function Obtained ISO13482 certification available for practical use, began rental service (March 2017) New model (July 2017) Number of bearings used: more than 100 21
Automotive Business: 1 Vehicle Production and Business Forecast (unit : M) 100.0 80.0 60.0 Global Vehicle Production Volume Japan North America Europe China ASEAN6 Others 85.8 87.8 89.1 14.5 14.3 13.4 4.3 4.0 3.9 94.1 95.0 13.8 14.6 4.1 4.0 21.4 23.0 24.1 27.3 27.9 800 600 400 590.5 312.5 657.0 350.6 Sales 705.5 696.3 698.0 374.8 368.3 355.0 Automotive Components 40.0 20.0 30 20 10 0.0 (unit : M) 40 0 19.9 20.4 21.0 21.9 21.8 16.4 17.1 17.7 17.9 17.6 9.3 9.0 9.0 9.1 9.1 FY2013 FY2014 FY2015 Japan Non-Japan Global 27.7 28.4 28.8 18.7 19.3 19.7 9.0 9.1 9.1 FY2017 Fcst Source: IHS Automotive, NSK Estimates Production Volume by Japanese Automakers FY2015 FY2017 Fcst 200 0 100 8.3% 80 60 40 20 0 278.0 306.4 330.7 328.0 343.0 FY2013 49.2 FY2013 Operating Income / Margin JP GAAP FY2014 FY2015 10.0% 10.0% 9.3% 9.0% 65.7 70.8 FY2014 FY2015 64.6 62.5 IFRS FY2017 May Fcst FY2017 May Fcst *Part of industrial machinery business operations were transferred to the automotive business. Accordingly, figures for FY2015 have been reclassified to match current segments. Automotive Bearings 22
Automotive Business: 2 The 5 th MTP: Status of Key Initiatives Powertrain Business Major driver of near-term growth in automotive business Respond to evolution in powertrain technology <Sales trend (forecast)> +7% +6% +6% Operational Excellence Innovate and Challenge Steering and uator Business Build solid foundation for next stage of growth Column EPS Received order for a major carry-over project through next-generation Column EPS Expand customer base: strengthen sales initiatives for target customers by region Electrical Components Field 17% 28% FY15 FY15 FY18 (Fcst) Powertrain products FY16 Demand increase due to expansion of AT market and multistepping AT FY17 Fcst FY18 MTP Fcst Traditional applications New applications (composition ratio) Steady growth in new application business along with electrification. MTP target achievement is foreseen. Focus on further expansion. Electric chargers, In-vehicle motors Extend product range Rack EPS Development is underway and on schedule Begin studying other projects Enhance competitiveness by leveraging ball screw technology: reduction in weight and operating noise, improved handling feel Ball screws for electric brake boosters Automatic emergency braking: mandatory installation in Europe and the US. China and Japan are expected to follow suit Korea needle roller bearing plant NSK Warner Mexico plant Manufacturing area (Jan. 2019 Production starts) Construction of new building in Haruna plant R&D center for press technology Gather related tech divisions in one location shorten lead time R&D area (Nov. 2018 Operation start) Received order for 2 nd new project (new customer) Peak volume in the next MTP to exceed 2.5 million/year Sales initiatives for further expansion are underway 23
Automotive Business: 3 The 5 th MTP: Status of Key Initiatives Innovate and Challenge Initiatives toward new automotive products (response to electrification) Ball screws for electric brake boosters Key points High efficiency in electric brake systems Reduced size and weight by unifying bearing and peripherals <Structure of product> Brake pedal Convert motor s rotational motion into linear motion using ball screws to generate brake pressure EV drive units Key points Achieved downsizing, lower weight, longer cruising range, lower noise and vibration by leveraging high-speed motor and traction drive speed reducer <Structure of EV drive unit> High-speed ball NSK product bearing for e-motor High-speed motor Axle module Traction drive speed reducer Transmission-equipped wheel hub motor Key points Achieved downsizing of hub wheel motor without compromising drive performance by employing special transmission ->Perform world s first demonstration test ->Work to commercialize wheel hub components <Parts targeted for commercialization> NSK product Hub unit bearing with built-in speed reducer Transmission Motor Motor One-way clutch unit Ball screw Bearing Nut Next-generation tapered roller bearing with plastic cage Miniature cage and roller bearing <Comparison with conventional structure> one motor Anti-corrosion bearing (small) two motors Balls (screw) Gear Achieve downsizing by unifying gear and bearing <Benefits of traction drive Speed reducer> Convey power through oil without using gears noise is close to zero Allow further high speed of EV drive unit speed reducer in most cases hollow Conventional speed reducer Transmission Newly-developed 24
(Supplementary Information) 25
(Supplementary Information) Consolidated Business Trend 1,000 800 600 400 200 Operating Income % ROE 3.4% -1.4% 522.8 522.2 17.8 8.0% 26.0 16.1% 14.0% 11.9% 12.1% 5.0% 6.6% 6.8% 8.7% 9.0% Net Sales (Left) 581.0 628.5 38.3 42.6 3.4% 1.8% Operating Income (Right) 717.2 772.0 69.3 647.6 587.6 62.4 22.1 2.0% 1.9% 11.3 10.3% 10.6% 710.4 733.2 732.8 43.5 44.4 32.4 9.2% 974.9 975.3 871.7 97.3 94.7 68.0 15.3% 14.9% 5.2% 10.0% 9.7% 6.1% 6.1% 7.8% 4.4% The 5 th Mid-term Plan 9.9% 10.0% 8.5% 6.9% 960.0 1,000.0 Fcst MTP 100.0 MTP 82.0 Fcst 949.2 65.3 120 100 80 60 40 20 0 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 Forecast FY18 JP GAAP IFRS Plan $ 125 116 108 110 117 115 101 93 86 79 83 100 110 120 108 105 105 EURO 118 131 134 137 150 162 145 131 113 109 107 134 139 133 119 115 120 0 Select & Focus Strategies Assembly of Streamlined Competitive Business Units Growth Strategies Improve Profitability Respond to Paradigm Shifts Reorganize Business Structure Developing Corporate Fundamentals to Support a 1 trillion Yen Company Embark on new chapter in evolution towards next 100 years 1 st MTP 2 nd MTP 3 rd MTP 4 th MTP th 26
(Supplementary Information) Quarterly Business Performance 300 251.2 Net sales 238.5 245.7 239.9 231.8 223.8 242.1 251.5 200 100 0 FY2015 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Operating income Net income attributable to owners of the Parent Operating income margin 40 10.6% 9.2% 10.0% 6.8% 7.3% 8.1% 6.3% 30 26.6 5.7% 24.6 21.9 20.3 20 17.2 16.4 17.7 15.3 16.1 17.1 14.6 15.3 11.6 12.7 10.4 10 8.2 0 FY2015 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 1USD= 121.36 122.24 121.50 115.46 108.25 102.45 109.34 113.64 1EUR= 134.16 135.98 132.94 127.24 122.17 114.27 117.83 121.09 1CNY= 19.56 19.32 18.90 17.62 16.54 15.36 15.98 16.56 27
(Supplementary Information) Consolidated Financial Statements () Non-current assets Assets Current assets 1,032.4 1,044.0 511.3 506.3 Change from FY2015 +11.6-5.0 Equity Current liabilities Liabilities / Equity Non-current liabilities Ratio of net worth to total capital 1,032.4 1,044.0 293.2 318.6 260.3 240.3 44.0% 44.2% Change from FY2015 +11.6 +25.4-19.9 521.1 537.7 +16.5 478.9 485.0 +6.1 End of 16.3 Mar. 末 2016 End of 17.3 Mar. 末 2017 End of Mar. 2016 End of Mar. 2017 Exchange rate End of Mar. 2016 End of Mar. 2017 1USD 112.68 112.20 1EUR 127.70 119.78 1CNY 17.39 16.29 28
(Supplementary Information) Inventories / Interest-Bearing Debt, Capital Expenditure / Depreciation and Amortization () Inventories Capital Expenditure Japan Non-Japan Inventory turnover 7.2 7.2 Japan 55.0 Non-Japan 58.6 130.6 131.8 83.0 81.6 47.5 50.2 26.9 27.1 28.1 31.5 End of Mar. 2016 End of Mar. 2017 FY2015 Interest-Bearing Debt Japan Non-Japan Net D/E ratio 0.23 0.28 278.2 267.4 41.4 43.2 236.8 224.2 Depreciation and Amortization Japan Non-Japan 43.0 43.4 25.5 24.0 17.5 19.4 End of Mar. 2016 End of Mar. 2017 FY2015 29
(Supplementary Information) 5 th MTP Capital Expenditure, Depreciation and Amortization, R&D Expenses IFRS FY2015 FY2017 <Plan> Capital expenditure 55.0 58.6 68.0 Depreciation and amortization 43.0 43.4 45.0 R&D expenses 11.2 13.9 15.0 5 th MTP -FY2018 <Plan> 180.0 130.0 40.0 30